Merck: “Let The Hep C Cure Price Wars… Commence!”

As we had long predicted, since Kenilworth would be third to market, for this iteration of Hep C treatments, it would have to offer clear price advantages, compared to Gilead and AbbVie, in order to gain a meaningful toehold, in the vast US marketplace.

This morning, Merck announced exactly that pricing strategy, with its ZepatierTM having cleared FDA last evening. The Merck combo pill will be priced (in the US) at about 40 per cent less than Gilead’s mega-blockbuster. So — the approval is good news, and the revenue will be great for Kenilworth — but the margins are not likely to be anything like those Gilead enjoyed last year.

In fact, it is almost certain that there will now be additional pricing pressure in the coming months, on all Hep C market participants. And Merck still must secure the approvals of pharmacy benefit managers, to get dispensed — but at this price, and in a single combo-pill (i.e., the same as Gilead’s Harvoni, but one up, over Abbvie’s Viekira Pak — a multiple pill offering) that is highly likely to occur. So, on balance, quite good news, for Merck. Here’s a bit from Bloomberg, overnight:

. . . .Merck & Co. has priced its new hepatitis C drug, just approved by U.S. regulators, at a sharp discount to competing therapies from Gilead Sciences Inc. and AbbVie Inc., a move that could start a new price war in the field.

The U.S. Food and Drug Administration said Thursday that it approved Merck’s single pill, which combines the medications grazoprevir and elbasvir, after granting the drug a priority review in July.

The medication, called Zepatier, has a list price of $54,600 for a 12-week regimen, according to a Merck statement on Thursday. That’s 42 percent lower than Gilead’s Harvoni, which retails at $94,500. . . .